The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Business Support Service from ABMCPL is Qualified as Input Services and Hindalco is eligible to avail of Cenvat Credit.
The issues to be decided in these appeals are Whether the Appellant M/s. Hindalco Industries Limited is eligible to avail of CENVAT Credit of Business Support Services received by them from ABMCPL (group company) for the period from April 2006 to March 2016?
The Appellant submitted that common infrastructural facilities were provided by ABMCPL to group companies of the Aditya Birla group, in the areas of human resources, information technology, business strategies, marketing, legal support, accounting support, knowledge and training etc.
At the end of each month, the expenses incurred by ABMCPL to provide such facilities were apportioned and allocated between the group companies in the ratio as decided by the Board of Directors of ABMCPL which was computed by taking into account various elements like profit, revenue, net worth and netblock.
On such invoices raised by ABMCPL, service tax used to be discharged, which was availed as Cenvat credit by the group companies, including the Appellant, which has been disputed by the department.
The Appellant submitted that the issue is squarely covered in their case, reported as Hindalco Industries Ltd. v. CCE, KolkataII,2023 (6) reported in TMI 457 – CESTAT Kolkata wherein it has been held that the services rendered by ABMCPL qualify as support services for business. It has been held that these services have a nexus with the manufacturing of goods by the Appellant and thus, qualify as ‘input services’.
The Appellant further submitted that the service recipient cannot be denied the Cenvat credit, where the provision of service and service tax paid by the service provider has not been disputed by the department at the end of the service provider.
A division bench of Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that the Tribunal in Appellant’s case, reported as Hindalco Industries Ltd. v. CCE, has held that “providing operational or administrative assistance in any manner or providing infrastructural support service or managing distribution and logistics service, fall within the ambit of ‘Business Support Service’. The ABMCPL has been providing these services to their group companies. As per the definition of BSS mentioned above, the services rendered by ABMCPL to their group companies would rightly fall under the category of ‘Business Support Service’. We observe that ABMCPL has been rightly paying Service Tax under BSS for the services rendered by them to their group companies. The department has also not disputed the payment of service tax by ABMCPL under the category of BSS.”
In light of the decision, the bench set aside the impugned order and allowed the appeal filed by the Appellant.
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